Readers of this publication will know that for some time, I’ve
forecasted the creation of a new
monetary system by which governments and banks gain total control
over all monetary transactions.

On the surface of it, this may seem an impossible goal, as it
would be so all-encompassing and would eliminate economic freedom entirely.
Surely, it would not be tolerated. However, I believe that it’s not only
relatively easy to create, but it will be sold in such a way that the public
will see it as an absolute panacea to their economic woes. Only those who are
far-sighted will understand its level of destruction in advance of its
implementation.

It might transpire like this:

Part 1: The Currency

·Any one of a number of triggers (decline of
the petrodollar,
dumping of US debt back into the US market, Europe defaults on its debt,
sanctions backfire, etc.) causes a crash in markets.

·Government declares a state of economic
emergency, states that cash is (and has been) the
problem and must be done away with for recovery to occur.

·A new electronic
currency is created, to be issued by banks.

·All economic transactions of any kind—both
debits and credits—are to be done through a currency card (purchases as small as a
candy bar or as large as a home; all credits, including wages, dividends,
sales of goods, etc.).

·Entire economic system becomes greatly
simplified, as only the currency card (or smart phone) is now needed by
anyone.

Part 2: Taxation

·At this point, every transaction, no matter
how small, is on record, so government can assess the cardholder’s income to
the penny, without the need to file for income tax each year.

·Government announces that the tax system is
a mess and that it must be simplified to relieve the people of the burden. In
future, tax will be taken by direct debit from the currency card account.

·Government later announces that, as the
annual filing is such a hardship on the average person, tax debits will in future
be done monthly.

It would be easy to present the above as a boon to all citizens.
Indeed, it might well be peddled as “the only possibility for a return to
prosperity.” It will take a while for the fact to sink in that citizens have
entered into a state of complete economic bondage to their bank and
government, and that to operate outside the system is difficult in the
extreme.

There can be no doubt that barter would become more common
(whether legal or not), but virtually all other transactions would be
centrally controlled and audited.

Harvard economist Kenneth
Rogoff even argues in the daily paper FAZ
that cash currency should be banned altogether. Central banks could impose
negative interest rates more easily that way, he explained. Tax evaders and
criminals would also find life more difficult. From this perspective,
banknotes and coins appear superfluous, he said at a presentation at the IFO
institute in Munich. Measures to spur the economy could be implemented more
easily that way.

This, of course, is the concept detailed above, although he adds
two nice touches. First, he suggests that negative interest rates are desirable;
that cashless currency is the answer. He also adds that a new system will
help to eliminate criminal behaviour.

Socialism Foothold

In 1936, John Maynard Keynes published his signature book, The General Theory of Employment,
Interest and Money. It was an instant success with both
socialists and governments around the world—the latter, because his new
“economic principles” stated that governments should control the monetary
system—full stop. It was music to their ears, and most governments have been devotees
ever since.

Mister Keynes was, first and foremost, a socialist. Although he
received his education in economics, right from the start, he treated
economics as a philosophy, not a science. By his own admission, he sought to
redraft the laws of economics to serve an unrelated end: the advancement of
socialism. Like the best socialists, he believed that truth was irrelevant;
all that mattered was the objective.

However, in recent years, we’ve seen a small rebirth in the
popularity of Classical Economics. More and more people, observing the
repeated failures of Keynesian Economics, have been crediting Adam Smith and
likeminded economists as having had the right idea all along. After all,
economics is the science of how
money works, not an art form that may be altered at the whim of
the theorist to fit some political preference.

And so, there are many (myself included) who are eager to see
what we believe would be the well-deserved downfall of Keynesianism, as the
debt-ridden, entitlement-driven economies of the world collapse under their
own ponderous weight.

But this hope may well be premature. In my belief, there is a
final rabbit in the Keynesian hat, and that rabbit is the electronic currency
described above. And if such a currency could be sold to a gullible public in
one country, it could be sold just as easily in other jurisdictions.

This being the case, it would not be much of a leap if the
concept were to be discussed universally and many governments were to
announce that an international electronic currency, issued by the IMF, would
solve all the
currency problems, including those of currency exchange and international
trade.

For at least one hundred years, there have been those who have
hoped for and worked toward a one-world currency. There can be no doubt that
the push for such a creation would receive support at the highest levels,
internationally.

If so, daydreams of a return to Adam Smith or a realisation
of the dreams of Ludwig von Mises and Friedrich Hayek may, for the
foreseeable future, be just that: daydreams.

As to what the overall effect might be, we might consider the
words of uber-financier Mayer Rothschild:

“Let me issue and control a nation’s money
and I care not who writes the laws.”

Herr Rothschild knew whereof he spoke. This principle led him
and his descendants to become immensely wealthy and powerful on an
international scale.

An electronic currency leads directly toward the bondage of the
people—directly away
from freedom. As a hedge against such controls, diversification into hard
assets such as precious metals and real estate might be considered. Just as
important, assets held outside
any country that is increasing its controls might be a positive move.

The ultimate way to diversify your savings internationally is to
transfer it out of the immediate reach of your home government and into
something tangible.

Something that cannot be easily confiscated,
nationalized, frozen, or devalued at the drop of a hat or with a couple of
taps on the keyboard—while retaining as much privacy as legally possible.
Physical gold and silver stored abroad in a non-bank vault fits the bill.

Gold and silver have served as money for centuries and across
many different civilizations. They have always been inherently international
assets. There is nothing at all particularly American, Chinese, Russian, or
European about gold or silver. Buying gold and silver is perhaps the easiest
step you can take toward internationalizing your savings. The next step is to
store your precious metals in a safe foreign jurisdiction.

If you know the other and know yourself, you need not fear the result of a hundred battles.

Sun Tzu

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.